China racing to expand data center capacity

China racing to expand data center capacity

December 29, 2011

China is building dozens, maybe hundreds of large data centers and vast “cloud cities” — industrial zones that aim to provide the foundations to support as many as 20 data centers — to support the needs of its fast-growing online population, estimated now at close to 500 million.

The data centers will help to meet escalating demand from telecom providers, and for services such as e-commerce, online banking and e-government, and will also provide computing infrastructure for overseas firms looking to expand in China.

The boom is providing opportunities for outside firms such as Hewlett-Packard and IBM. “We have more people in China focused on data center development and strategy than, I believe, in any country in the world,” said Rick Einhorn, worldwide director for HP’s Critical Facilities Services group.

Some are skeptical that companies will pick China as a base for providing IT services internationally. “There are questions around ownership rights for data and other assets,” said IDC analyst Michelle Bailey.

A former security consultant who worked on data center projects in China said foreign companies have three main areas of risk: local employees absconding with data, traffic being monitored or interfered with, and the loss of equipment during sudden “inspections” by Chinese police.